The new Chancellor told the meeting of finance ministers that British hedge funds and private equity managers would be happy to give more transparency in exchange for a watering down of the proposals governing non-EU funds.

Although the 27 finance ministersvoted through the tough regulationsthat Britain has campaigned against, a statement after the talks said the group “notes the concerns” expressed by the UK and a handful of other countries.

The statement added that the negotiation process that will now start between the Council, Parliament and the Commission will take “into account the concerns expressed by member states.”

Mr Osborne’s spokesman said the outcome “leaves the door open” to getting the concession for the Britain, where over 80pc of Europe’s hedge fund and private equity industry is based.

The spokesman told reporters: “We have reached a political agreement. It is a very good result in the circumstances, the best outcome we could have expected.”

The Alternative Investment Fund Managers directive, which will put hedge funds under a super-regulator for the first time, has now been agreed in draft form by the Econ and Ecofin. The European Parliament, Commission and Council will now finalise the details in three-way negotiations before agreeing a draft to be voted on by MEPs in July.

Trade bodies have repeated concerns over the unintended consequences of the directive. The European Venture Capital Association said it would hit small companies that depend on VC funding.